DESCRIPTION (provided by investigator): Policies to contain prescription drug costs in the elderly are widely debated because they will impact heavily on the health of older Americans as well as affect the fundability of federal and statewide programs of drug coverage for the elderly. Many coverage plans include annual deductibles that require the patient to pay 100% of drug costs out-of-pocket until a predefined deductible limit is reached. Income-based deductibles set these limits to vary directly with the patient's income status. Although we have shown earlier that some drug cost containment methods can result in net health care savings without adverse outcomes in an elderly population (R01-HS10881), it remains unclear to what extent income-based deductibles may adversely affect adherence to chronic drug therapy and health outcomes in elderly and poor patients. Based on our earlier work we propose to study the clinical and economic consequences of an income-based deductible policy in a large-scale natural experiment in the province of British Columbia. Starting January 2003, all residents 65+ (about 500,000) will be subjected to such a policy. We will use longitudinal data analysis for linked individual-level health care data describing medication use, other health care use, and clinical events in all such patients. Additional analyses will implement patients' self-report in a subgroup of patients. We will focus on specific drug classes and chronic conditions that are prevalent in elderly patients in which a dose reduction or discontinuation would be most important, or likely cause measurable adverse health effects. The project will produce the first data describing the clinical and economic consequences of such a cost-containment policy in a large and stable population of older patients. It will also analyze savings for drug benefit plans and the impact of financial contributions by patients. Its findings will be of great importance for the ongoing debate over proposed programs for drug coverage in the elderly and will provide a set of refined recommendations and tools for planning, implementing, and executing future policies. A separate dissemination component will bring together researchers and policymakers from a variety of settings to review these findings and assess their relevance to emerging research and policy issues related to drug therapy for the elderly.